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    Ansay, Allyson Charissa T - Activity 2

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    カイ みゆき
    The document provides information on Carlo admitting David as a partner in his business. It gives the capital account balances for Carlo before the partnership formation. It is agreed that adjustments will be made for doubtful accounts, inventory valuation, prepaid expenses, and accrued expenses. David will invest enough cash to obtain a 1/3 interest in the partnership. The computations show David's cash investment is 180,000 and the total partnership capital is 540,000. The total assets of the partnership upon formation are 624,260. Journal entries are provided to adjust Carlo's capital account for the agreed upon adjustments.

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    Ansay, Allyson Charissa T - Activity 2

    Uploaded by

    カイ みゆき
    576 views3 pages
    The document provides information on Carlo admitting David as a partner in his business. It gives the capital account balances for Carlo before the partnership formation. It is agreed that adjustments will be made for doubtful accounts, inventory valuation, prepaid expenses, and accrued expenses. David will invest enough cash to obtain a 1/3 interest in the partnership. The computations show David's cash investment is 180,000 and the total partnership capital is 540,000. The total assets of the partnership upon formation are 624,260. Journal entries are provided to adjust Carlo's capital account for the agreed upon adjustments.

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    ANSAY, ALLYSON CHARISSA T_ACTIVITY 2

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    The document provides information on Carlo admitting David as a partner in his business. It gives the capital account balances for Carlo before the partnership formation. It is agreed that adjustments will be made for doubtful accounts, inventory valuation, prepaid expenses, and accrued expenses. David will invest enough cash to obtain a 1/3 interest in the partnership. The computations show David's cash investment is 180,000 and the total partnership capital is 540,000. The total assets of the partnership upon formation are 624,260. Journal entries are provided to adjust Carlo's capital account for the agreed upon adjustments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    576 views3 pages

    Ansay, Allyson Charissa T - Activity 2

    Uploaded by

    カイ みゆき
    The document provides information on Carlo admitting David as a partner in his business. It gives the capital account balances for Carlo before the partnership formation. It is agreed that adjustments will be made for doubtful accounts, inventory valuation, prepaid expenses, and accrued expenses. David will invest enough cash to obtain a 1/3 interest in the partnership. The computations show David's cash investment is 180,000 and the total partnership capital is 540,000. The total assets of the partnership upon formation are 624,260. Journal entries are provided to adjust Carlo's capital account for the agreed upon adjustments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Allyson Charissa T.

    Ansay
    BSA – 2

    Instructions
    1. Carlo admits David as a partner in his business. Accounts in the ledger for Carlo
    on June 30 of the current year, just before the admission of David, show the
    following balances:

    Cash                                        P68,000
    Accounts Receivable               142,000
    Merchandise Inventory            200,000
    Accounts Payable                       80,000
    Carlo, Capital                           330,000

    It is agreed that for purposes of establishing Carlo’s interest, the following


    adjustment shall be made:
    1. An allowance for doubtful accounts of 3% of accounts receivable is to be
    established.
    2. The merchandise inventory is to be valued at P230,000.
    3. Prepaid expense of P12,260 and accrued expenses of P8,000 are to be
    recognized.
    David is to invest sufficient cash to obtain a 1/3 interest in the partnership.

    Compute for the following:


    1. How much is the cash investment of David?
    Carlo, Capital P 360,000
    Divide by: 2
    Cash investments (David) P 180,000
    Cash P 180,000
    David, Capital P 180,000

    2. How much is the total capital of the partnership upon formation?


    Carlo, Capital P 360,000
    Add: David, Capital 180,000
    Partnership Capital P 540,000

    3. How much is the total assets of the partnership upon formation?


    Cash P 252,260
    Accounts Receivable 142,000
    Merchandise Inventory 230,000
    Total Assets P 624,260

    4. Journalize the adjustments in the capital account of Carlo.

    Account Title DR CR
    1. Carlo, Capital P 4,260
    Allowance for bad debts P 4,260
    Adjustments for doubtful accounts

    2. Merchandise inventory 30,000


    Carlo, Capital 30,000
    Adjustments for merchandise inventory

    3. Cash 12,260
    Carlo,Capital 12,260
    Adjustments for prepaid expense

    Carlo, Capital 8,000


    Cash 8,000
    Adjustments for accrued expense

    Balances after revaluation


    DR CR
    Cash P 72,260
    Accounts Receivable 142,000
    Merchandise Inventory 230,000
    Allowance of bad debts P 4,260
    Accounts Payable 80,000
    Carlo, Capital 360,000
    Total P 444,260 P 444,260

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